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Health insurance : Double benefit of Insurance and Tax Saving

Don't forget to insure you and your family against medical related problems. Such policies are highly economical as compared to the average cost of treatment. They will prove highly beneficial in protecting your finances. 

Moreover, they come with tax benefit too. This benefit is in addition to the Rs.1 lakh limit under Sec 80C.

Section 80D of the IT Act allows you to deduct the premium paid on medical insurance policy from your taxable income and save tax.

The salient provisions of this section are as under:


> The policy should be (a) for your family (i.e. self, spouse and dependent children) or (b) your parents

> The maximum deduction allowed is Rs.15,000 with respect to the policy for family members

> An additional Rs.15,000 deduction is allowed with respect to the policy for the parents. And if they are senior citizen (i.e. age 65 years or more), then the limit is enhanced to Rs. 20,000

> Within the above limits, you can also claim deduction of expenses up to Rs.5,000 incurred towards preventive health check-up

> Payment should be made out of your income chargeable to tax i.e. if you have paid the premium before earning any taxable income the deduction will not be allowed

> Premium paid by cash will not be eligible for tax benefit. However, payment for health check-up can be made in cash.

> Policy must be purchased from an approved insurance company


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